How much money do you need to have before you can make a substantial amount of money by investments?

Question by e: How much money do you need to have before you can make a substantial amount of money by investments?
How much money do you need to live off investments?

Best answer:

Answer by crehan
Assume that if you have an annual average return on your capital of 5 to 8%, this is very good. Don’t believe the hype that would make you believe you can have unbelievable returns. You may make it once on one specific investment, and lose your shirt on all the other ones. If you want a very safe investment like a bank term deposit, figure 2 % to 3 % on relatively long terms. Remember that your rate of return is directly linked to the risk you are taking. You can make 25% on a stock investment, or you could lose 75 % of your investment. With a bank, if you lock your deposit for 3 years and get 3%, there is not much left, if anything, after inflation and taxes.
So, when you talk about ”substantial amount”, decide what type of investment you want to make.
For a very safe one, at 3% per year, to make 10 000 dollars, you need a capital of 333 000 dollars.
For an medium risk return of 7%, you need about 143 000 dollars. Remember that at the end of the year you could also wind up with less than your initial money rather than 10 000 dollars.
Now if you think you can have a 50% return on your investment every year, I can sell you the Brooklyn bridge. You could make a lot of money with tolls!
My advise : Find a decent paying job, save, invest conservatively, and let it accumulate. As your money grows, you may allocate a small portion to more speculative investments, and you should consider that the money you invest speculatively might entirely disappear instead of bringing you the fortune you expect.

If anything sound too good to be true, it definitely is not true.

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